Additional Materials:

Contact:

Concerns have been raised about the fairness of the "bid down" approach of the Department of Commerce's Information Technology Solutions Next Generation (COMMITS NexGen) contract. In response to these concerns, the fiscal year 2006 Science, the Departments of State, Justice, and Commerce, and Related Agencies appropriations conference report requested our review of COMMITS NexGen. This letter transmits the briefing document we provided to Congress on May 15, 2006, concerning a variety of issues related to the COMMITS NexGen contract. Specifically, we provided information on (1) how the COMMITS NexGen contract is structured to meet its intended goals, (2) what effect the tier system has on the task order competition process, and (3) what oversight and internal control procedures Commerce has implemented to address the risks of interagency contracting.

The COMMITS NexGen tier structure, which includes a range of sizes of small business contractors and allows similar size contractors to compete against each other, is unique among other similar contracts. We have found that many of the 55 COMMITS NexGen contractors have grown significantly or have been acquired by larger businesses and may no longer meet small business size standards. In addition, small business accomplishments might be overstated since specific small business size standards are not identified for each task order. We also found that a significant portion of the task orders intended for the smallest contractors were issued to larger, incumbent contractors. However, because of the way in which the Department of Commerce has defined incumbency for this contract, an incumbent contractor may have obtained its initial work through a contracting vehicle other than COMMITS NexGen. With regard to oversight and internal controls, the COMMITS NexGen program has established procedures; however, it is unclear whether some of these controls are in place and other, such as performance measures, have yet to be established to ensure that the program is meeting its goals. Program officials said they will begin to collect specific performance data later this fiscal year. The Small Business Administration has proposed regulations that would address the issues we identified with contractors not meeting the small business size standards; therefore, we are not making any recommendations at this time.